Market Analysis For Woolworths Limited Organic Products And Services In Australia

Industry market and evaluate current trends of Woolworths

This report presents a business plan for Woolworth’s retail limited. It discusses target market and target audience for introducing organic product and services. It also presents the industry market for Woolworths limited and examines current trends effectively. It also discusses the PESTEL analysis for evaluating the situation of Australian country. It also depicts competitor’s analysis as it helps to understand the position of competitors for obtaining a favourable result. It also discusses the primary and secondary market for delivering organic products and services in Australia.

The evaluation industry market is supportive for gaining the understanding of the market. It will be effective for introducing targeted product and services in the marketplace. In this, three factors are considered by the organization like growth, profitability, and macro environment.     

The growth of organization demonstrates fluctuation of the firm with respect to the financial condition. The following table shows gross margin, operating margin, and EBIT margin that is considered to evaluate the financial situation of the firm (Sutton-Brady, Kamvounias, and Taylor, 2015).

From the above chart, it is analysed that the gross margin of the firm is enhanced by 4% as compared to the last record.

The profitability could be supportive for evaluating actual flows of cash within the firm. 

The following table demonstrates the profitability of firm:

The PESTEL analysis is effective to evaluate the situation of the country. PESTEL is a strategic technique to evaluate the macro environment of the Woolworths retail company in Australia. PESTEL considers different factors like political, economic, social, technical, environmental, and legal that could influence macro environment of Woolworths Limited in Australia (Lawley, Birch, and Craig, 2016).     

The political factor plays an imperative role in identifying the elements that could influence the profitability of Woolworths limited, Australia. Woolworths limited deals in Food & Staples trade at international level. For successfully delivery of foods products and services, the organization identified the political factor that could influence the business process. These political factors are the stability of politics, and the significance of organic product and services in Australia. It will also support the organization to develop an association between free markets and control system (Bayne, Schepis, and Purchase, 2017). In Australia, there are different factors that could impact on business performance such as foreign trade policy, tax policy, overseas market, labour law, and trade restriction. It will directly impact on the growth of business. Hence, it could be stated that this country could be beneficial for investing in the food industry (Balmer, Abratt, and Kleyn, 2016).

Growth

The economic factor could direct impact on the performance of business like an economic cycle, foreign exchange rate, interest rate, and saving rate. It will also be supportive to identify the aggregate investment and demand of the economy. The economy of the country could direct impact on getting competitive benefits. The lower inflation rates enable the organization to invest in the food industry and obtain higher benefits from it. The lower interest rate could offer the opportunity to organization for introducing their goods and services in Australia (Zarkada-Fraser and Fraser, 2015). There are certain economic factors that could also influence the business named government intervention, lower level of the regulation act, disposal incomes, and growth rates. It will support Woolworths Limited to obtain the competitive benefits in Australia. The skill of an employee could also impact on the income level of economy. The income could be an important factor in taking an effective buying decision. It is also analysed that the education level of consumers could also influence the productivity of organization as well as employees (Armstrong, Adam, Denize and Kotler, 2014). 

The social culture demonstrates interest, attitude, and belief of the population. The organization should understand needs and beliefs of consumers towards products and services for effectively producing products and services and obtain a positive outcome. The attitudes and beliefs of consumers could play a greater role in how marketers comprehend consumers and how they plan the marketing message for delivering the foods. Moreover, certain social components could affect the business performance like level of skills among population, class structure, culture, nature of the society, attitude (career, health), and leisure interest (Santos, Svensson, Padin, and Høgevold, 2015). Thus, it is analysed that Australians are health conscious so Woolworths limited could be capable to get higher benefits in less time and cost.

The technical factors could also impact on the performance of business. The technique could support an organization to gain awareness of their product and services at shorter time with less cost. There are many technical factors that could impact on the business growth like innovation and discoveries, advanced technology rate, and new techniques podiums. Further, it is also addressed that Australian believes in advance techniques to consume any product and services (Powell, 2016). Consequently, it could be imperative for Woolworths to gain their productivity and efficiency. Moreover, Woolworths could invest in the organic foods in Australia to get a higher return. In addition, it is also analysed that changes in the technology could affect production level of the firm. It could also impact on the cost and value chain structure of the firm. Hence, it can be said that technical factor could be an important for obtaining success by new product and services (Rosenbaum-Elliott, Percy, and Pervan, 2015).          

Profitability

The environmental factor could also a direct impact on business growth. It is also analysed that different regions have different environmental standards that could influence the profitability of the firm. The country has made their environmental and liabilities laws as it would influence the success and failure of business. There are certain factors that could be different from the country to country like weather, climate change, laws and regulating environmental pollution, air and water pollution in food retailing industry, recycling, waste management, and attitude ecological product and services (Rajabian Tabesh, Batt, and Butler, 2016). Hence, it is analysed that Australia could be the best place for introducing the new organic product and obtain a favourable result.          

The legal factor could be imperative for getting a positive or negative result. Moreover, a large number of institutions are failed to protect their intellectual property due to the appropriate legal framework. Hence, PESTEL is used by Woolworths limited to evaluate specified market condition before entering into the Australian market. Consequently, it would support to eliminate the possibilities of failure in the specified marketplace. Woolworths should consider certain legal factors such as Anti-trust law, discrimination law, Consumer protection and e-commerce, Consumer protection, and e-commerce (Sutton-Brady, Taylor, and Kamvounias, 2017). Other legal factors are Consumer protection and e-commerce, data protection, consumer protection and e-commerce, employment law, and consumer protection. Since, these factors could direct impact on the success of firm.

 As per the above table, it could be analysed that Woolworths supermarket is oldest and well-recognised retail brand in Australia while its key competitors i.e. ALDI, Wesfarmers and Coles group has a higher level of international presence. It is also assessed that Woolworths has a huge market share and a large number of supermarkets due to deliver a higher range of product and services. In contrast to this, its competitors offer top quality products at the reasonable prices to their consumers. It is also evaluated that Woolworths has maintained effective amalgamation of brick and motor and online sales distribution whereas its competitors have maintained the low level of operating cost (Bailey, 2016). Furthermore, Woolworths has a strong commitment to atmosphere and sustainability along with it organises effective corporate social responsibility programs. On the other hand, competitors of Woolworths use digital marketing techniques to make their unique position in the retail industry. It is also observed that the market share of Woolworths is 36.8% that is highest as compared to the competitors. In opposed to this, its competitors have a higher rate of success from the online retail in Australia and also have a strong image in the marketplace (Fernie, and Sparks, 2014). 

Macro Environment (PESTEL factor)

Above table shows that Woolworths has a lower level of international presence. It has also late entered into the online channel. In opposed to this, its competitors have a low level of advertising as compared to the Woolworths supermarkets. Competitors of Woolworths also offer a limited range of products and services. Woolworths has low growth of online retail in Australia while its competitors provide a lower level of client satisfaction as it has a low market share as compared to Woolworths (Ellis, and Waller, 2017).    

Market segmentation

The market segmentation could support Woolworths limited to classify their market and introduce their product. There are different factors, which are considered by the organization to classify their market such as buying behaviours, psychographic traits, geography, and demographics. The segmentation could support the organization to make marketing efforts in the business process. Woolworths retail organization could offer quality product and services to their selected consumers (Warland, 2017). Through this, an organization could categorize their potential consumers on behalf of income, and interest level. Woolworths limited could also provide a special discount on the weekend and special occasions as it would attract more consumers and improve the sale of organization. Through this, Woolworths limited would classify consumers on behalf of their age gender, and income. The consumers would focus on the age group of 17 to 37 years of consumers to offer their product and services (AO Dos Santos, Svensson, and Padin, 2014).        

Moreover, Woolworths limited could select this age group because this group of people would give more preference to the health. The company would focus on both middle and business class to deliver their services. Woolworths limited would also offer their service at reasonable price and cost due to attracting both middle and higher class for long-term. Woolworths limited would classify their consumers on behalf of their need for encouraging consumer’s purchasing decision (Abratt, Higgs, and Nel, 2015).            

Behavioural Segmentation 

The organization could segment their consumers on behalf of their opinion towards the organic product. This approach enables an organization to understand the behaviour of people as it would be effective to satisfy consumers and retain them for long-term. The organization would provide a discount on their products and services for getting a positive result. Through this approach, the organization would focus on categorizing consumers on behalf of price, income, and interest. It would be significant to get favourable result regarding specified organizational goal. The behavioural segment also supports Woolworths limited to separately understand consumer and satisfy them in limited time and cost (Groeger, Moroko, and Hollebeek, 2016). As a result, an organization could be capable to change the buying behaviour of customers.     

Political Factor

Geographic Segmentation 

Woolworths limited could categorize their market on behalf international, national, and regional basis to attract a huge number of consumers. Moreover, there are many factors that could be considered by an organization like occupation, income, and business. It would directly impact on the performance of organization (Devin and Richards, 2016).             

Market size

The organization could focus on the larger market rather than the small market for getting higher profitability in the least time. If the market is too small to generate a huge amount of profit then Woolworths limited should determine the target market with specified product. Consequently, Woolworths limited will be capable to obtain the positive result (Beneke, Chamberlain, Chohan, and Neethling, 2015).

Woolworths limited would categorize their markets in two parts like the primary and secondary market. It is discussed as below:      

Primary market

The primary market is essential for an organization to obtain a higher amount of profit. It will also assist an organization to influence the behaviour of employee. Woolworths limited will focus on sports and health conscious people to offer their services in the marketplace. They could direct impact on the sales and growth of company (Devin, and Richards, 2016).    

Secondary market

The secondary market is also essential to obtain long-term profit. It mainly focuses on the future primary buyers. Thus, it is also analysed that Woolworths limited would focus on people who could deliver the company’s services in the marketplace like a wholesaler, retailer, and intermediate. It could support an organization to obtain the positive outcome (Groeger, Moroko, and Hollebeek, 2016).  

Primary Segment

Woolworths could target their consumers as per different elements such as behavioural, psychographic, geographical, and demographics. On behalf of a geographic factor, Woolworths limited will classify their consumers who come from the urban region of Australia. The company will select both genders of people such as female and male. Moreover, Woolworths limited would select 17-37 years of people to deliver their products and services in Australia. Woolworth retail organization would focus on both medium and upper-class consumers (Abratt, Higgs, and Nel, 2015). On the basis of a psychographic factor, Woolworths retail would focus on consumers who prefer to take the quality products and service rather than quantity.                                      

Perceptual map

The below perceptual map depicts the competitor’s position of Woolworth’s retail company:

This map depicts that there are three main competitors of Woolworths named ALDI, Wesfarmers and Coles. It also illustrates that Woolworths delivers the high-quality product at the maximum rate as compared to its key competitors (Warland, 2017).

Economic Factors that Impact Woolworths Limited

Conclusion

As per the above discussion, it can be concluded that Woolworths supermarkets offer a wide range of product and services to their consumers. Moreover, it can be examined that Woolworths limited could use STP to determine their product and services and obtain a positive response. Moreover, it can also be summarized that organization uses PESTLE method to determine the probability of success in the specified marketplace. It is also analyzed that PESTEL is an effective technique for evaluating the situation of the country. Moreover, It is also evaluated that organization could also identify their primary and secondary market to concentrate on particular consumers and market.

References

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